Global food prices hit all-time high: UN

Farmers pack sugar cane in the southern Egyptian town of Nagaa Hamady in Qena, some 700 km (435 miles) south of Cairo, January 10, 2010. Photo: REUTERS

Food prices around the world reached record highs last year, according to the United Nations Food and Agriculture Organisation (FAO).

The FAO Food Price Index surged to a record high in December 2010, driven by rising sugar, cereal and oil prices -- topping the previous high of June 2008 when shortages led to a food crisis in some countries.

The FAO index measures the monthly price changes for a basket of food comprising of cereals, oil seeds, dairy, meat and sugar. It averaged 214.7 points in December, up from 206.0 points in November.

Moreover, the FAO's Sugar Price Index jumped to an all-time high of 398.4 points in December from 373.4 points in November.

The FAO Cereals Price Index, which includes prices of such items as wheat, rice and corn, rose to an average of 237.6 points in December, the highest level recorded since August 2008 and up from 223.3 points in November.

“We are concerned, the real reason for concern is the unpredictability,” said the Food and Agriculture Organization’s economist Abdolreza Abbassian to Reuters.

“There is still room for prices to go up much higher, if for example the dry conditions in Argentina tend to become a drought, and if we start having problems with winterkill in the northern hemisphere for the wheat crops.”

Abbassian noted, however, that some of the factors behind the food riots of 2007 and 2008 in some nations – including weak production in poor countries – do not currently exist, thereby reducing the likelihood of more civil unrest.